The Standing Committee on Public Accounts (Scopa) has warned that the Road Accident Fund (RAF) may face a massive influx of claims should it be unsuccessful in defending the claim form used for compensation by claimants in court.

The committee said the fund was likely to find itself in a difficult position for not considering the liabilities arising from the claims.

“The impact of the above is likely to have severe financial consequences for the business of the RAF, which in turn will have a negative knock-on effect on claimants and society as a whole,” said Scopa in its draft report.

Scopa made the observations in a section of the draft report that was considered at its meeting on Friday following an inquiry into the affairs of the RAF.

The report was drafted by the committee’s secretariat on various aspects of the matters traversed during the inquiry undertaken that ran from last year until this year.

Parliamentary legal advisor Fatima Ebrahim said the old claim form introduced in 2008 was in line with the RAF Act, which required claims to be set out in the prescribed form.

Zurenah Smit remains in custody as bail application awaits new judge.

“Our courts have accordingly referred to compliance with this form as the ‘gateway’ to any claim for compensation,” Ebrahim said.

The old form required simple documents such as identifying the insured vehicle, a medical report, the date and place of the accident, the amount claimed, and supporting documents for medical expenses.

However, Ebrahim said the RAF amended the form in 2022 to require “substantial compliance”, which demanded significantly more information and documentation, including specialised reports.

“If a claimant fails to provide all the ‘compulsory’ information and documents at the lodgement stage, the claim will not be registered or allocated a claim number,” she explained.

In its draft report, Scopa said the introduction of the 2022 RAF 1 Form made the claims process largely inaccessible.

It heard evidence that the 2022 RAF 1 Form is complex, difficult to comply with, and costly because of onerous requirements.

The form also increased litigation and did away with direct claims by claimants.

“The committee heard that in the absence of successfully lodging a claim, the claimants would not be able to readily access any assistance from the RAF.”

Scopa also said it heard evidence that the impact of the new requirement resulted in the number of registered claims dropping significantly.

According to the committee, apart from the form being available only in English, the claimants were essentially prevented from lodging direct claims without the assistance of attorneys.

“It appears that the introduction of the 2022 RAF 1 Form has only increased costs, given the legal consequences and the plethora of litigation,” reads the report.

It also said there was no evidence that the board properly interrogated the executive management on the legality of the changes to the form.

“On the contrary, the former board members appear to have merely rubber-stamped decisions taken by executive management,” said Scopa in its findings.

Scopa Chairperson Songezo Zibi said the courts had guided how the form was to be interpreted and how the RAF should apply it, while ActionSA MP Alan Beesley said the draft report made him go cold.

Beesley feared what would happen when a final judgment on the RAF form ruled in favour of those prevented from lodging claims.

“We need to highlight the risk that is real. It makes me so cold. We talk about R500 billion,” said Beesley.

Zibi said the National Treasury has estimated the liability for the RAF at more than R400 billion.

“I agree that we need to put in our recommendations that they (the RAF) must be prepared to reinstate those claims. We should take advice on those that prescribed,” he said.

DA MP Patrick Atkinson said Scopa should make findings against the former board and former CEO Collins Letsoalo, under whom the change in the claim form was made.

“They created this liability to grow when it should not have. What they have done has the potential to break the organisation. They should be held to account,” Atkinson said, adding that they had pursued litigation in hopeless situations.

ANC MP Helen Neale-May said there was concern with the pattern of litigation to change the RAF form.

“Even the court ruled against their efforts to pursue that, which resulted in fruitless and wasteful expenditure. We must put together the total amount spent on litigation,” Neale-May said.

This article was originally posted by IOL